the future . . .

the future includes: 1. significantly increased savings on every side - consumer and government. this will result in a sharp slowdown in the economy due to reduced demand. we will need savings to build a new economy. 2. less leverage everywhere - some of it will be prudent and some of it will be an overreaction to the current problems. this will also result in slower growth and, if it is accomplished by issuing equity, damage to the stock market. 3. reduced deficits - government will have to reduce its budget and trade deficits. the reduction in the government deficit will involve sizable reductions in social security, medicare and medicaid as the deficit increases as the economy slows. 4. civil unrest - it is not believable that the citizenry will take all of these changes calmly. unlike the days of the depression, today's population is not very well behaved. 5. reimporting our production - as the advantages of offshore production are reduced, companies will build plants and hire workers. 6. a weaker dollar - who would want dollars when the economy is in the dumps? 7. the end of liars in washington - what else needs to be said? this will probably include new political parties. 8. a completely new education system - how can our kids compete when teachers are not serious about educating our kids? 9. the re-imposition of glass-steagal - pretty obvious, don't you think? 10. significant losses in everyone's retirement accounts - as the stock and bond markets correct the excesses of the last 15 years. see 1 above. ain't it great? i think that we will see new lows before it's over.

And how do traders on this board make money using this new information??? Short S&P and short the Dollar right now? Or is it just a regular gloom and doom post without trading value?

Denleo

There are two types of traders on this board that I don't understand.. The kind that cringe when price goes against them for 5 mins.. And the kind that buy and hold til it goes to infinity or zero. I have no idea how they make money. Maybe they're clueless paper traders like me.

Edited by dcengr, 13 April 2008 - 08:05 PM.

Now if you are REALLY interested in knowing the future... spend 50 minutes listening to this prize-winning scholar...

Economists View "The Coming Collapse of the Middle Class"

A very revealing look at how our lives changed over the past 40 years in the US and the implications to inflation, personal spending, incomes and debt.

Time well spent.

Dow should have never gone to 10,000. There has been an unprecedented inflation created by the gov't to support it. The more the gov't and the investment banks fight the problem by creating inflation, the more the social erosion will be. There might come a magical moment where the growth can sustain these high valuations, but it would be a lot easier instead if there was a shorter term pain and deflation to more sustainable levels rather than blowing another bubble immediately next like the Fed is trying without any regard to whether the economy is capable of supporting it. Yes, the pain will be painful with the rising jobless rates and so on, but the prices will stop skyrocketing for the majority. Of course, the gov't would become bankrupt since it would not be able to pay the interest on the existing colossal debt during a deep contraction. But it will come sooner or later and the later it comes the bigger the blow will be...

Edited by arbman, 13 April 2008 - 09:12 PM.